Some Governing Council members were more concerned about downside risks to inflationConcern about downside risks was linked to potential further weakening of economy and labor marketOther members took the view that risks to inflation outlook were balancedMembers discussed whether weakness in Canadian consumption and housing could partly be due to caution on the part of householdsMembers felt consumers could be waiting for lower rates to make large purchases or enter the housing marketDiscussed scenario where economy could weaken and it might be appropriate to speed the pace of cutsLabor market softening, wage growth still elevatedHousing market subduedNo pre-determined path for rates, decisions to be made meeting-by-meetingCouncil puzzled by successive upside surprises in US household spendingFelt low US saving rate was a possible indicator of weakness going forwardIn China, continued weakness in domestic demand had increased the downside risk to the growth outlookThe Bank of Canada cut rates by 25 bps at the meetingMacklem signalled a willingness to cut more-quickly after the decisionBOC deputy Nicolas Vincent speaks tomorrow
The comments on the US economy are more interesting than the ones on the Canadian outlook. I wonder if Macklem got the idea about the low savings rate from his trip to Jackson Hole.
This article was written by Adam Button at www.forexlive.com.
